The area's name came about in the early 19th century, when French trappers who believed they had become ill after drinking water from the valley's principal stream called it malade, meaning “sickly.”

In the mid-1850s Brigham Young dispatched 15 families to the upper Malad Valley to establish a Latter-day Saint agricultural outpost. Many other early settlers were Welsh; the community celebrates this heritage during the Malad Valley Welsh Festival in late June.